LONDON — The shrinking pound bolstered Burberry’s third-quarter retail performance 22 percent to 735 million pounds, or $911.4 million, with underlying sales up 4 percent in the three months to Dec. 31. Like-for-like sales climbed 3 percent, with the balance of growth coming from new stores.
Pre-Christmas trading, which beat analysts’ expectations, was particularly robust in the U.K., where comparable sales growth in the period was 40 percent due chiefly to the post-referendum pound, with both tourists and locals snapping up bargains. The pound has fallen an average 14 percent against the dollar, and 11 percent against the yuan since the U.K.’s vote in June to leave the European Union.
Shares were up 1.3 percent to 16.12 pounds or $19.65 at 10:50 a.m. GMT.
Burberry said in a trading update Wednesday that during the period it notched low single-digit percentage growth in the Asia-Pacific region, with an “acceleration” in Mainland China, which delivered high single-digit percentage comparable sales growth. It said Hong Kong improved, registering a low single-digit percentage comparable sales decline, with positive conversion offsetting the majority of the decline in footfall.
Continental Europe remained weak, although France saw an improvement compared to the second quarter. In the U.S., there was a low single-digit decline in sales with the domestic and tourist demand “uneven,” according to the company.
Burberry said its digital business outperformed, with growth in all regions, and was led by mobile. Conversion was supported by the launch of new payment methods. Burberry said its redesigned web site and the “enhanced” local web site in China delivered strong growth in the three-month period.
Fashion once again outperformed replenishment and led growth across all product categories. Accessories outperformed, led by strength in bags. Burberry said the September collection delivered “strong results” following the company’s first see-now, buy-now efforts and fully co-ed runway show.
Christopher Bailey, chief creative and chief executive officer, attributed the underlying growth to “a record number of views” of the company’s festive film and strong demand for new products.
“This third-quarter improvement reflects early progress from our plans to drive Burberry’s performance for the long term. We continue to take action to position the business for growth over time and our plans to enhance efficiency are on track,” he said.